Jon Peddie Research have released their findings for the graphics market in Q3 of 2012, with bad news for the market, though not so bad for NVIDIA. The downward trend in PC sales has had an effect on the overall graphics market, with the number of units sold dropping 5.2% from this time last year and only NVIDIA seeing a rise in the number of units sold. AMD saw a drop of 10.7% in the number of units they shipped, specifically a 30% drop from last quarter in desktop APUs and just under 5% in mobile processors. Intel's overall sales dropped 8%, with both segments falling roughly equally but NVIDIA's strictly discrete GPU business saw a 28.3% gain in desktop market share and 12% for notebooks when compared to last quarter.

Worth noting is what JPR includes in this research above and beyond what we used to think of as the graphics market. Any x86 based processor with a GPU is included, tablets to desktops as are IGPs and discrete cards; ARM based devices, cell phones and all server chips are excluded.

"The news was terrific for Nvidia and disappointing for everyone the other major players. From Q2 to Q3 Intel slipped in both desktop (7%) and notebook (8.6%). AMD dropped (2%) in the desktop, and (17%) in notebooks. Nvidia gained 28.3% in desktop from quarter to quarter and jumped almost 12% in the notebook segment.

This was a not a very good quarter the shipments were down -1.45% on a Qtr-Qtr basis, and -10.8% on a Yr-Yr basis. We found that graphics shipments during Q3'12 slipped from last quarter -1.5% as compared to PCs which grew slightly by 0.9% overall (however more GPU's shipped than PCs due to double attach). GPUs are traditionally a leading indicator of the market, since a GPU goes into every system before it is shipped and most of the PC vendors are guiding down for Q4."

Late last week NVIDIA reported their Q3 2012 (they have an unconventional reporting calendar), and the results were overwhelmingly positive for the once struggling company. Throughout 2010 NVIDIA struggled with the poor results of their 400 series of graphics cards as compared to the relative smooth sailing that AMD had going into the DirectX 11 marketplace. NVIDIA was also struggling to get the original Tegra to be accepted by the marketplace, which never occurred with that particular generation of products.

NVIDIA reported gross revenues of $1.07 billion for the previous quarter, with a net income (GAAP) of $178.3 million. Margins improved to a respectable 52.5%, which is generally considered high for a fabless semiconductor company. When we compare these results to AMD which had reported earnings a few weeks ago, we see that while NVIDIA had less revenue (AMD reported $1.7 billion) the company had nearly double the overall profit (AMD reported around $97 million). AMD has a strong CPU business, which is something that NVIDIA is working on. AMD reported margins in the 45% range, but they also have a larger workforce and larger capital expenditures at this time.